UPDATE 3-Danone cautious on growth in face of tough economy
* Danone sees 4-5 percent underlying sales growth in 2015
* Expects slight rise in margins forecast
* Says economic conditions to stay difficult this year
* Weak dairy, cautious outlook disappoint analysts (Recasts with CEO comments, analysts, updates shares)
By Dominique Vidalon
PARIS, Feb 20 (Reuters) - French food group Danone predicted underlying sales growth of no higher than five percent this year and only a slight rise in operating margin, held back by deflation in Europe and difficulties in Russia, its top market.
The maker of Activia and Actimel yoghurt expects to benefit from cost cutting at its European dairy business. It also sees a recovery in baby food sales and profit in Asia, where an infant formula recall weighed last year.
But economic conditions are likely to remain difficult, with "fragile or even deflationary" consumer trends in Europe and currency volatility in emerging markets, the company said on Friday.
In Russia, which accounted for 11 percent of Danone's sales in 2013, a tumbling rouble has further increased milk prices which were already up due to tight global supplies. The company gets 60 percent of its revenue from dairy products. Continuación...